The instrumental variable estimation method for semi-parametric spatial lag econometric model with cross section data is presented.The results show that the estimators of the parameters have the asymptotic normality,and their convergence rates are equal to p>-1/2.And the estimator of the nonparametric function has the asymptotic normality in interior points and its rate of convergence is equal to the optimal convergence rate of the nonparametric function estimation.Use this model to research how the spatial spillover effects of the R&D investment and environmental regulation have an effect on technological innovation.The results are as follows.1)The development of R&D investment and its spatial spillover effects promote china regional technological innovation.2)Environmental regulation has different effects on technological innovation in different regions.Low environmental regulation restrains the development of technological innovation,and high environmental regulation promotes the development of technological innovation.Especially in the central area of china where environmental pollution is serious the effect is particularly evident.For most areas like Fujian and Guangdong where environmental regulation is moderate,environmental regulation has less impact on technological innovation.These areas need to further enhance the intensity environmental regulation.